Fonterra staff may trade shares

TIM HUNTER
Last updated 05:00 08/12/2012

Relevant offers

Farming

New conveyor ride saves yards of time for farmers and sheep in Taranaki 'Opportunist' fertiliser dealer undercuts big players Kiranjit Singh left paralysed after workplace accident on Karaka farm Dairy farm sales rise 20 per cent from a year ago NZ farmed rare Salmon king in Japan RSE workers made 'scape goats' over housing affordability Central Otago District Council to consider independent report into economic impact of ORC's proposed water plan changes Hard nosed attitude needed for science business startups to get off the ground Northland's Marsden Estate owners selling award-winning winery Richard Morrison knows he has big boots to fill as new Manawatu/Rangitikei Feds president

Fonterra has waived a ban on staff trading units in its new Shareholders Fund after a rush to sell into the soaring market post listing.

In an email sent on Thursday, Fonterra chief financial officer Jonathan Mason told staff the company's securities trading policy prohibited buying and selling within six months.

However, the policy was being waived until December 20 "because [Trading Among Farmers] is new so that staff may not have been aware of the policy requirement not to engage in short-term trading, and because staff, when applying for units, may not have expected that they would receive their full allocation, which may have created financial hardship."

More than 1300 Fonterra staff bought units in the Shareholders Fund at $5.50 each through the Friends of Fonterra offer. It appears the Friends were the only investors to receive as much stock as they asked for.

Other buyers - institutions and clients of broking firms - are understood to have had their allocations drastically scaled back to 10 per cent or less of the quantity requested.

Trading in the stock opened on the NZX at $6.66 on November 30 and the price quickly rose to $6.90, delivering a windfall to short-term sellers.

The temporary waiver on short-term trading applies only to staff who don't have access to material inside information.

In the email, Mason said the ban on short-term trading was intended to discourage speculative trading by staff. It was put in place when the board approved Trading Among Farmers, which changed the co-operative's capital structure and introduced the Fonterra Shareholders Fund.

The fund units were trading at $6.65 late yesterday.

Ad Feedback

- BusinessDay.co.nz

Special offers
Opinion poll

Is it time for authorities to introduce tougher penalties for poaching?

Yes

No

Vote Result

Related story: Booby traps for poachers cost farmers

Featured Promotions

Sponsored Content

Agri e-editions

Digital editions

Read our rural publications online